After years of delay, TotalEnergies is set to relaunch construction on its US$20 billion liquified natural gas (LNG) megaproject in Mozambique, even as negotiations over additional costs linked to delays continue, reports Reuters.
The French energy company and the Mozambican government agreed on Thursday to restart work on the project in the northern province of Cabo Delgado. Construction previously halted in 2021 after a deadly Islamist insurgents attack on the nearby city of Palme forced Total to evacuate personnel.
Last year, in late October, Total said that security conditions had improved enough to lift the force majeure declared after the attack. The company also informed the Mozambican government that the four-year delay had increased costs by US$4.5 billion, saying the consortium wanted the development and production periods extended by 10 years as partial compensation.
Speaking on Thursday, Mozambican President Daniel Chapo said that the two sides would negotiate to reach a consensus on revised costs once an audit is finalised.
“What must be clear is that negotiations do not impede the project’s progress,” Chapo said. “Restart is a reality.”
[See more: TotalEnergies prepares return to Mozambique’s restive Cabo Delgado Province]
Chapo emphasised the country’s work to improve security conditions, mostly notably through an agreement with Rwanda that provides the legal framework for the continued presence of Rwandan troops in Cabo Delgado during the project’s construction phase.
The president estimated this phase will involve the hiring of around 17,000 workers, with most jobs going to residents of Cabo Delgado. Total has already trained about 4,500 workers to be employed on the project, with 1,500 being trained in Palma in carpentry, electrical work and other trades needed to build the onshore facilities.
“You will see a massive ramp-up in activity in coming months”, Total’s CEO Patrick Pouyanné said on Thursday. “We have one target now, which is to deliver the LNG by 2029 on a budget of US$20 billion, so there’s a lot of work to be done.”
With an annual capacity of 13.12 million metric tons of LNG, it is among the largest projects of its kind in Africa, expected to add as much as US$35 billion to government coffers through taxes, profits and other contributions.
Chapo believes it will play “a catalysing role in the national economy, stimulating local value chains, promoting the transfer of knowledge, driving job creation and boosting the training of Mozambican human capital.”
